As the online gambling industry looks to spread eastward, China is developing a homegrown approach meeting the competition head-on.
In an interview with the Web site People's Daily, Koy Xiaowei of China's Audiovisual and Internet Publication Department discussed the emerging online gaming market in the country.
China is currently recognized as one of the biggest potential markets, said Xiaowei. In 2006, the country's online gambling industry pulled in $843.5 million, a 73.5% increase over 2005.
Xiaowei credits the growth to the Chinese free service model.
"It is undeniable that there are still gaps between China and other nations in terms of software development," he told People's Daily. "However, the innovative business mode of Chinese game providers has won approval from many of their foreign counterparts."
In order to regulate and promote the development of the online gaming industry within the country, Xiaowei said the government should first create a healthy environment for operators and secure intellectual property rights.
He added that the government should also look to encourage businesses to be self-disciplined in professional ethics and fair competition, while working to break down the monopolies of foreign enterprises.
The industry, Xiaowei said, still faces many problems, including the standardization of regulations, illegal activity and a shortage of skilled research and development personnel, which are limiting China's growth in the market.
"Objectively speaking, the Chinese Internet gaming industry is still at an early stage of development and will face increasingly fierce competition in the near future," he said. "We need to have a clear understanding of its current situation."